How many business owners do you know who actually have a succession plan in place if something happens? The answer is likely, not many people.
It’s sad, but true, far too many people have no succession plan in place for their life’s hard work – their business. Whether it’s a succession plan or even an exit plan, it is imperative there be one in place for the future. This may shock you, but virtually 90% of businesses surveyed admitted they had no such plan in place.
A few had a general idea that another family member (who no one had even spoken with yet) would take the business over or that someone in the future would buy it, which may or may not happen. Succession planning is far more critical than you may think and is important for the current state and future of your business. This goes to the heart of your business and affects things like business continuity, continuing a business relationship with your employees and customers, as well as managing a good return on investments.
A succession plan needs to be more than “Oh, Johnny will take over when it’s time for me to retire.” Johnny may have a few thoughts of his own on that, and they might not include taking over the family business. A succession plan also needs to address bigger issues aside from who will continue the business. It needs to address the total integration of all aspects of the business in eventual transition.
While this might seem to be an impossible task, sitting down with an attorney whose area of expertise is succession planning will get rid of the cobwebs right off the bat. The attorney knows what has to remain in place, how it needs to be transferred over, and to what rules and regulations such a transition needs to adhere.
Rule number one is to plan the succession process as early as possible. Outline the reasons for it, the goals you want to achieve, and the extent of the succession plan; for example, your interest or lack of interest in remaining involved on the fringes of the new organization. Outline what type of person you would want to take over your business and how that person would need to develop the type of leadership you envision for the future of your business.
Obviously, there are many more things you would need to put into place for a business succession plan and you can’t be expected to know all of them. This is why the smart plan is to consult with an attorney who is an expert in this area. It will save you time and money in the long run.
Patrick Warwick is the lead content contributor for Chicago bankruptcy firm, The Law Office of Jay F. Fortier, P.C.. To speak with a Chicago bankruptcy lawyer or learn more about creditor rights, Chicago bankruptcy, Chicago bankruptcy lawyer, Chicago bankruptcy attorney, visit Westsidebankruptcy.com